Ten years ago this month, three friends from law school and the working world decided to give up their comfortable jobs for a vision: to figure out a better way for people to access the legal system. They called it LegalZoom. Brian Liu, Brian Lee and Eddie Hartman were so sure of their vision, they were willing to stake their livelihoods on it. Like any start-up, they faced great odds—especially during a time when the economy had bottomed out after Internet stocks were being dumped on the market. Nonetheless, they decided to keep moving forward.
Now, after helping more than a million customers, they take a look back at the last 10 years of LegalZoom. They candidly share their story here, including their strategies, struggles, friendship, dumb luck and unshakable belief in what they were doing. For any start-up company, especially a technology start-up, theirs is a grand tale of success.
Take us back to the beginning. You planned a much bigger launch, but then the stock market crashed. How did you make it through in the face of such odds?
BRIAN LEE: Basically, we tried to survive with the least amount of money that you could. So everything we did was basically on the cheap. Lunch was ramen or peanut butter sandwiches. We’ll tell you this story. Basically, our very first business trip we had to go to San Francisco and we couldn’t afford the airline tickets. So we crammed into a car, we drove up there. We stayed at a $29 hotel—all three of us.
EDDIE: All three of us. In one hotel room.
BRIAN LIU: Remember when we went up to Manchester, New Hampshire and we all spent the night in the same room as well?
EDDIE: Okay, not only did we spend the night in the room… I remember because I got the cot in the little tiny breezeway next to the bathroom, first of all. Second of all, do you remember where we ate dinner that night?
BRIAN LEE: No.
EDDIE: It was the gas station convenience store.
BRIAN LIU: I do remember that!
EDDIE: I got franks and beans. We thought we were going to heat it up but the microwave was broken so I had to eat them cold.
Sounds to me like the company really started on a friendship.
BRIAN LEE: Oh yeah, absolutely.
Is that why you think it’s survived?
BRIAN LIU: I think that’s why it got started. That’s why it thrived.
EDDIE: The friendship is definitely what fueled us in the early days.
BRIAN LIU: That’s what caused a lot of arguments, too.
EDDIE: Because you can be honest with your friends, you know, when the site goes down.
BRIAN LIU: There was probably at least a couple times, each lasting about a week, that Brian Lee and I wouldn’t speak to each other. Other times, I had to separate Eddie and Brian Lee from coming to blows.
EDDIE: Frequently I wouldn’t be talking to you guys and you wouldn’t notice.
BRIAN LEE: I mean, I consider these guys my brothers.
EDDIE: That’s true.
BRIAN LEE: I really do. We know each other so well because in the early days, we were spending a hundred hours a week just the three of us. We got to know each other pretty well. It’s amazing that we’re still friends actually.
Did you have any fears or any obstacles in launching the company?
BRIAN LIU: No, none. I think the only time I was ever hesitant was when it came to actually quitting the job. Brian Lee, of course, was the first one to do it.
BRIAN LEE: True.
BRIAN LIU: And, then it was me and Eddie.
BRIAN LEE: So basically all three of us thought this is a great idea. Let’s do this. And we couldn’t raise any capital for it. So everyone is kind of scared. We thought, “Okay if we do this—it's going to be a long, hard road.” And we had no money. I didn’t care. I quit my job.
BRIAN LIU: We were talking back and forth, "Ok, we’re going to do it.” Then we said, “Okay, we’re going to do it at the end of March."
BRIAN LEE: So I called him up, and I said, “Hey, Brian, I just quit my job.”
BRIAN LIU: And it wasn’t the end of March yet.
BRIAN LEE: I said, “Hey Eddie, I quit my job. Did you guys give notice yet?” “No.” A week later, “Did you guys give notice yet?” “No.” A month later, I said, “Okay, if you guys don’t quit your jobs, I’m going back to work.”
EDDIE: I remember that for some reason the heat was on Brian Liu, and Brian Lee would talk to me saying, "You really have to tell Brian that he’s got to quit his job.” I’d say, “Yeah, we really do have to tell Brian Liu that.”
BRIAN LIU: Now that I think about it, I don’t know why I was hesitating so much.
EDDIE: We were already building the website. I don't know if you remember this. We were already building the website starting in the middle of March. We were already getting things ready.
BRIAN LEE: The scariest part though—I honestly thought that you guys weren’t going to quit and I would have to get a job and start working again.
When you first started the company, when did you realize that this idea was going to work? When did the light bulb go off and you go, “Oh, my gosh.”
BRIAN LEE: Suzanne Staria [not a real name].
EDDIE: That’s exactly what I was thinking.
BRIAN LEE: Suzanne Staria was the name of our very first customer. Before that, the only customers we had were my parents, Eddie’s parents, Brian’s sister.
BRIAN LEE: And then we checked the order log and there was a name on there. Suzanne Staria.
EDDIE: And I said, “Do you know who this is?”
BRIAN LEE: I said, “No. Do you know?”
EDDIE: It was a real customer.
BRIAN LEE: I’ll tell you what when you’re struggling the way that we were struggling, that $99 was the best money we’ve ever made.
EDDIE: To this day.
BRIAN LEE: That was the best feeling in the world.
And now you’ve had over a million. How does that feel?
BRIAN LIU: It makes me feel great that we’ve been able to have a positive impact on so many people.
Looking back, did you envision where you are today?
EDDIE/BRIAN LIU: Yes.
BRIAN LEE: Completely, 100%. As entrepreneurs, you don’t start something if you don’t 100% believe in what you’re doing. So we believed it when we started it. We believed in it during the hard times, the good times.
Can you describe how Robert Shapiro got involved with the company?
BRIAN LEE: This is back in the pretty early days of the Internet. We knew that we had to attach someone to our company that people trusted, or at least they trusted that they knew what they were doing. Because no one had ever heard of me, Brian or Eddie. So we came up with a list of attorneys that we thought would be a great fit, and Robert Shapiro was the number one name on our list. We called everyone we knew, “Do you know Robert Shapiro? Can you put us in touch with Robert Shapiro?” No one we knew knew him.
BRIAN LEE: So I called information and I called him at 10 o’clock at night thinking I would leave a voicemail. He actually picked up his phone. I said, “Hi, I’m calling for Robert Shapiro.” And he said, “This is Robert Shapiro. How can I help you?” I said, “Well, my name is Brian Lee and I have a business idea I would like to run by you. He said, “Well, I’m not really interested right now and it’s kind of late at night.”
Right then it hit me that I’ve got just a few seconds. So I said, “Well, wait. How do you know you’re not interested if you don’t hear me out?” So, he says, “You’ve got two minutes.” And in those two minutes I told him the whole concept. At the end of it, he said, “You know, I hear a hundred ideas all the time, but I actually really like this one. So why don’t you call the same number tomorrow and set up a lunch meeting.” We were so excited. And when we had the first meeting together, he fell in love with the concept.
Why do you think the idea of LegalZoom took off so well with the public?
BRIAN LEE: Because no one likes to pay $400 an hour.
EDDIE: I think the reason that the idea took off with the public is because it’s an idea that’s time has come. I don’t think though that would have happened as rapidly as it did without the amazing people that we have here at LegalZoom. But I do think that no matter what, the way that law was done in America before we came along was a way that had to change—and that powered our success.
How have you been able to keep ahead of the pack?
BRIAN LEE: You have got to be smart.
EDDIE: Yeah, smart and work hard and believe. I think that smarts are important, sure, and talent is important, but belief in that dream is the most important thing of all. It is what kept us at the office ‘til midnight and beyond every night. It’s what enabled us to succeed where these other companies with far more money than us have failed.
BRIAN LIU: We didn’t blow our money on stupid things. Do you remember when we met with that guy from the investment company?
BRIAN LEE: Yes, I do.
BRIAN LIU: This is when I thought we were going to raise $5 million dollars because we were a hot dot-com in 2000. So we were talking to these marketing agencies. You know what they told us to do?
BRIAN LEE: Take out full-page ads in the Wall Street Journal.
BRIAN LIU: Full page ads in the Wall Street Journal for one straight week. Each full-page ad was $250,000. He said, “That’s the way you make a big splash.” We didn’t know anything and we said, “Wow, whatever you say.” We really got lucky we didn’t raise that $5 million. Instead, we got smart, didn’t waste money and made every dollar count.
EDDIE: Belief plus hungry—that equals success. Hungry so you watch that bottom line.
So, now what about the next ten years? If there isn’t the hunger, what’s it going to take to get to the next level?
BRIAN LIU: We still have a lot of hunger. But what we learned is to focus on the steps ahead. Don’t focus on the obstacles.
BRIAN LEE: I totally agree with that. You know there are obstacles. But at the same time if you’re creative enough, if you’re innovative enough, and if you work hard towards that goal, everything is possible. That’s one thing we learned at LegalZoom.
EDDIE: I keep coming back to this issue of belief—understanding that you know what the obstacles are. But you believe enough in where you’re going that you’re willing to say, “I’m going to put those to the side and I’m going to concentrate on what I need to do to get where we’re going.”